The free stockmarket report from UK-Analyst.com for 25th February 2010
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From UK-Analyst.com: Friday 26th February 2010 The coming month or two will include the defenestration of Brown. He will be unemployable in the UK and I suggest that since he claims to be able to walk on water he should head out to Florida where there is a vacancy as an orca handler. Hint to orca: sorry, pal, gristly Brown may be but an orca does what an orca gotta do. - An extract from todays diary of Evil Knievil on t1ps.com For bon mots and great shorts from infamous Evil click HERE All of Britain cheered as the ONS said that the UK economy grew by 0.3% in the last quarter of 2009, three times its earlier estimate. We might also be cheering at the weekend if rumours are true that the Prime Mentalist will call the election. A similar upward revision was seen in the US, with annualised growth in the same period raised from 5.7% to 5.9%. However, despite good gains on the London markets, the pound fell against the euro due to concerns over the recovery and government borrowing. US markets were subdued in early trading due to limited news flow. At the London close the Dow Jones was marginally ahead by 8.09 points at 10,329.12 and the Nasdaq was up by 1.45 points at 2,235.67. In London the FTSE 100 pushed up by 76.3 points to 5,354.52; the FTSE 250 rose by 117.45 points to 9,344.39; the FTSE All-Share was up 38.19 points at 2,736.8; and the FTSE AIM Index gained 4.49 points to close at 667.64.
Brokers' Notes Nomura remained bearish on RBS (RBS), reiterating its 'reduce' stance and 31p target. The broker said that, although fourth quarter figures were better than expected, it found it difficult to envisage the group generating the required pre-tax profit to justify the current market capitalisation of 20.3 billion pounds. Overall results were close to expectations in most areas, although profit before impairments was lower than expected, at 7.7 billion pounds compared to 8.7 billion pounds. It reduced its pre-tax loss estimate for 2010 from 3.2 billion pounds to 1.1 billion pounds, but it continued to remain neutral on the sector as a whole. RBS shares lost 0.71p to 37.67p. Charles Stanley upgraded its stance on secure power solutions firm Chloride (CHLD) from 'hold' to 'buy' with a 220p target as it expects the group to move into a "renewed upgrade cycle". Market forecasts show equipment revenues in the Uninterrupted Power Supply (UPS) market growing by 10% by the end of 2010. Chloride has shown its ability to offset previous weaknesses in the UPS market, increasing service revenues and gaining benefits from sterling weaknesses and cash acquisitions. The broker said that, leaving bid speculation aside, the firm offered "meaningful upside potential", with improving market growth and renewed earnings momentum. The shares gained 3.4p to 184.7p. Daniel Stewart said that telecoms firm Spirent (SPT) is expected to focus on 2010 in its results on 4th March, with key elements being on demand drivers such as long-term evolution (LTE) mobile data and the Chinese market. Revenue and EBITDA for 2009 was forecast to be 272.1 million pounds and 62.9 million pounds respectively. Spirent has reinforced its leading position in the market, being embedded in leading operators' development programmes and thus being associated with major implementations in the mobile, ethernet and GPS sectors. However, until the company provides evidence of "a further spur to demand", the 'hold' stance and 99p target price will remain in place. Spirent shares inched ahead 0.1p to 104.1p.
UBS said that it believes that Wolseley's (WOS) decision to upgrade earnings estimates for the first time in three years is a sign that margin pressure at the US unit Ferguson is not accelerating. The broker expects the unveiling of a strategic review on 22nd March will provide a catalyst for the share price to move ahead. It anticipates that Wolseley will set out medium-term margin targets, as well as which parts of the business are viewed as core, and which may be slimmed down or sold off in due course. The 10% increase in earnings guidance by the group was the basis for an increased target share price of 1723p, up from 1585p. UBS' stance remained at 'buy'. The shares rose by 30p to 1550p. GE&CR upgraded its stance to 'long term buy' for gold miner Medusa Mining* (MML), after results on 24th February showed "tremendous progress" from the firm. In the six months to 31st December, production totalled 39,192 ounces of gold, almost double the corresponding figure for 2008. The second phase of the expansion programme is on target, and will take the firm to an annualised production level of 100,000 ounces per year. This will be achieved through the addition of new projects in the Philippines. GE&CR said that it expected the momentum of 2009 to be sustained into 2010, as the company is self-funded and has increased its exploration budget to 18 million dollars. Medusa shares moved ahead by 5.5p to 210p. Blue-Chips Lloyds (LLOY) reported a pre-tax loss for 2009 of 6.3 billion pounds, down slightly from 6.71 billion pounds in 2008. The shares lost 2.39p to 52.51p. Total income was up from 21.36 billion pounds to 23.96 billion pounds. The loss was less than anticipated, with analysts having forecasted a pre-tax loss of 7.4 billion pounds. Total impairments however, were up significantly at 23.99 billion pounds, an increase of 61%. Diluted earnings per share rose to 7.5p, from 6.6p in 2008, but no dividend was paid for the year, in contrast to the 11.4p per share dividend of 2008. The group said it expected "significant improvement" in the performance of continuing businesses in 2010. Shore Capital reiterated its stance of 'hold', saying that "better value and growth opportunities lie elsewhere in the sector". Pre-tax profit at outsourcing group Serco (SRP) jumped 30% to177.1 million pounds, with revenue up 27.1% to 3.9 billion pounds in calendar 2009. Adjusted earnings per share and the dividend saw similar rises, up 30.6% at 26.76p and 25% at 6.25p respectively. Excluding currency effects, adjusted operating profit margin rose by 45 basis points to 5.74%. The firm expects an increase in revenue to 5 billion pounds and a 6.3% rise in adjusted operating profit margin by the end of 2012. It commented that 2010 had begun with a "record" order book and significant opportunities in the UK and internationally. Despite the good performance, Panmure Gordon advised investors to 'sell', saying that a lot of positive news was already reflected in the share price. Its target price remained at 360p. Serco shares motored ahead by 32.5p to 554p. Shares in Rolls Royce (RR.) rose by 19.5p to 558p at it announced that it had agreed to buy the outstanding 67% of Norwegian marine technology firm ODIM ASA for 154 million pounds in cash, the same pro rata price per share paid for its 33% share last year. The firm specialises in handling systems for seismic and offshore vessels.
Mid-Caps Brit Insurance (BRE) reported that pre-tax profit in 2009 (excluding foreign exchange on non-monetary items) for 2009 more than quadrupled to 171.3 million pounds. The performance was boosted by higher premiums and lower claims, with gross written premiums up 10.4% at constant currencies, at 1.7 billion pounds. Earnings per share were up by 32% at 113.2p. A final payment of 30p per share making a total distribution for the year of 60p per share will be paid in the form of a capital reduction alongside a 4 into 1 share consolidation. Due to the consolidation, the shares jumped by 569.6p to 764.5p. Pre-tax profit for 2009 at property website Rightmove (RMV) fell by 1% to 37.8 million pounds, with revenue down by 6% at 69.4 million pounds. Cost-cutting and increased average online spending helped underlying operating profit to rise 2% to 41.9 million pounds, and underlying earnings per share rose 28% to 30.5p. The full-year dividend remained unchanged at 10p. The number of advertisers grew by 6% to 17,664. Costs fell by 17% to 27.5 million pounds as the company reduced its administration staff headcount by 16%. Numis Securities said that, given the high operational gearing of the firm, there would be a very high flow through of higher than forecast revenues to its profit forecasts. The broker upgraded its stance from 'hold' to 'buy', increasing its target price from 683p to 746p. Rightmove shares added 36.5p to 634.5p.
Colt Telecom (COLT) remained cautious about the pace of economic recovery, even as 2009 pre-tax profits cantered ahead by 32% to 94.7 million euros. Revenue at constant currencies was down by 1.3% to 1.62 billion euros as gains in Data and Managed Services were offset by weaker Voice revenue. Earnings per share were up 27.3% at 14 cents. Colt said that confidence in 2010 will start to return to those of its customers that have delayed or reduced IT expenditure plans. Colt shares lost 4p to 133p. Adjusted pre-tax profit for 2009 at Davis Service Group (DVSG), the laundry and workwear group, remained almost unchanged at 91.7 million pounds, as did adjusted earnings per share at 39.4p. Revenue was down 3% at constant currency, at 970.9 million pounds and the dividend was maintained at 20p. Investec said that the firm "delivered pleasing results in a tough market". The broker said it raised its full-year 2010 estimates by around 5% to reflect both cost reductions and the impact of acquisitions. A stance of 'buy' and a 500p target was repeated. The shares rose by 7.8p to 405.6p. Small Caps, AIM and PLUS
Shares in recruitment firm Harvey Nash (HVN) rose by 2p to 34.5p as it released an update that said trading in the second half of the year had been in line with expectations. Total revenue for the year to 31st January is expected to be 375 million pounds, with pre-tax profit of at least 4 million pounds. The total dividend for the year will be up 10%, the group said, at 2.2p. Harvey Nash said that the year had been a challenging one, but the balance sheet remained "sound" and there was no long-term debt. Panmure Gordon observed that the firm was "better placed than most, given its exposure to IT and its software outsourcing revenues". The broker remained with its 'buy' stance and 46p target. Pre-tax profit for the six months to 31st December at car engineer Ricardo (RCDO) halved to 3.8 million pounds, as revenue declined by 11%. The firm said the results were in line with expectations and that diversification had helped to limit the impact of the recession. Towards the end of the year, order intake increased, particularly in orders from the US and China. Diluted earnings per share were down by half to 6.2p, although the dividend remained unchanged at 3.2p. The positive momentum is expected to carry over into the second half of the year. Arbuthnot Securities said that the firm had good long-term growth prospects and cash generation. It continued with its 'buy' stance and 300p target. Ricardo shares fell back by 10p to 273p.
In the year to 31st August, vehicle management information systems Minorplanet Systems (MPS) made a pre-tax loss of 3.8 million pounds, having made 1.8 million pounds pre-tax profit in 2008. Shares in the perennial dog dropped by 4p to 15p. Revenue fell to 9.7 million pounds, down 36%, with a loss per share of 242p incurred, against earnings per share of 110p in 2008. The firm said that it had suffered from a recession-driven fall in demand from SMEs but that it had undertaken an aggressive cost-cutting programme which had resulted in a 40% drop in headcount and a 45% fall in UK overhead costs. Accountancy firm Vantis (VTS) welcomed a ruling from the Court of Appeal that said that an alleged 'Ponzi scheme' run by disgraced financier Sir Allen Stanford (he of the helicopter landing at Lord's) was centred on the island of Antigua, not the United States. The US receiver had argued that the 'nerve centre' of the operation had been in the US. The court also ruled that around 100 million dollars located in Britain will be subject to a restraining order obtained by the Serious Fraud Office. Vantis said it would appeal this decision, arguing that keeping the money frozen would delay the release of funds to investors. The shares fell by 2.5p to close at 21.5p.
Building consultancy and quantity surveying group Baqus (BQS) issued a profit warning, saying that results for the year to 30th June 2010 will be below forecasts as a result of tough trading conditions. The shares fell by 0.375p to 3.25p. It blamed the subdued construction sector, saying public and private sector projects had been delayed or cancelled. Seymour Pierce commented that the company was "well-placed to weather the difficult conditions". The stance was put under review, having been at 'buy'. Shares in Advanced Medical Solutions (AMS) gained 4.5p to 38.25p as Consort Medical (CSRT) confirmed that it had made an approach which may lead to an offer for Advanced Medical.
Medusa is a corporate client of Rivington Street Holdings, the ultimate owner of this website. The t1ps Smaller Companies Gold and Growth Funds owns shares in Medusa Mining.For more details on our gold fund - ISA qualifying - email goldfund@t1ps.com
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